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EDITOR’S NOTE: MIT has embarked on a major global study of the future of utilities as they adapt to new business models, distributed generation and an onslaught of new data driven technologies. The Energy Times invited the project’s executive director to outline the effort, which we will continue to track. Carlos Batlle, an MIT visiting scholar, discussed the project at the recent Energy Times conference, Empowering Customers & Cities.

One of the major challenges for the future evolution of power systems worldwide is how to accommodate rapid penetration of distributed energy resources such as renewables and storage technologies plus new information, communications, and technology solutions, enabling smarter operation of the grid, including a more efficient and active management of demand at all voltage levels.

Raanan Miller

These new technologies have the potential to revolutionize how we conceive of the electricity sector in the near future and dramatically change the business model of power companies.

The Utility of the Future Study—currently underway, with results expected to be completed next fall —is a partnership between the MIT Energy Initiative and IIT-Comillas University. The study is focused on exploring how the industry organization and regulation of power systems and markets should evolve to guarantee that the deployment of these new resources contributes to the efficient evolution of power systems.

The objective is to provide an analytical, neutral framework within which to evaluate the economic, regulatory, and technological impacts of the ongoing evolution of the power sector. The study authors plan to take advantage of lessons learned in different jurisdictions, with special focus on Europe and the United States.

The study is supported by a consortium of leading international companies and organization spanning the breadth of the power system value chain, including, energy companies, electric utilities, and system integrators.

Over the past year, the project has made significant progress in identifying and framing some of the key issues and scenarios to explore, and has invested significant energy in developing analytical models with which to begin answering some of the key study questions. Examples of some questions provided below:

Which key distributed energy technologies have the potential to disrupt the power sector?

How might distributed energy resources – such as solar panels or plug-in vehicles in garages – impact power system operations, markets, and networks?

What kinds of business models may develop, and how will they successfully serve both upstream electricity market actors and energy consumers?

What impact could these new business models have on incumbent utilities, and what opportunities may exist for other industry sectors to capitalize on these changes?

How will regulation need to evolve to create a level playing field for both distributed and traditional energy resources?

How do markets need to be adapted to provide efficient price signals for both centralized and decentralized energy resources?

What are the costs of inefficient prices and charges currently applied in different jurisdictions?

What are plausible visions of the future of the power sector, including changes for incumbent utilities, new electricity service providers, regulators, policy makers, and consumers?

MITEI—the energy research hub at MIT—has a long history of identifying research topics that lend themselves to a consortium approach. The diverse set of perspectives that result from this strategy helps to tackle critical issues in the industry at large while also benefitting individual members with an increased understanding of the unique implications to their own organization.

Raanan Miller is the executive director of the Utility Of The Future, MIT Energy Initiative.